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Forex - GBP/USD declines amid U.K. elections, eyes on U.S. data

Published 05/07/2015, 04:44 AM
Pound loses ground vs. dollar with U.K. vote in focus
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Investing.com - The pound declined against the U.S. dollar on Thursday, as markets were jittery ahead of the day's U.K. election results and as investors also focused on Friday's U.S. nonfarm payrolls report.

GBP/USD hit 1.5166 during European morning trade, the session low; the pair subsequently consolidated at 1.5184, sliding 0.42%.

Cable was likely to find support at 1.5087, the low of May 5 and resistance at 1.5291, Wednesday's high.

Investors also remained wary amid Thursday's U.K. elections, which were widely expected to result in a hung parliament and an unstable coalition government.

The pound had strengthened on Wednesday after data showed that growth in the U.K. service sector jumped to an eight-month high in April.

Research firm Markit said the U.K. services purchasing managers' index rose to 59.5 in April from 58.9 in March. Economists had forecast a decline to 58.5.

Meanwhile, the dollar remained under pressure after payroll processing firm ADP said on Wednesday that U.S. non-farm private employment rose by 169,000 last month, below expectations for an increase of 200,000.

Investors were now looking ahead to Friday's employment report for further indications on the health of the U.S. job market.

Recent economic reports have indicated that the economy has slowed since the start of the year prompting many investors to push back expectations on the timing of an initial rate hike by the Federal Reserve.

Sterling was lower against the euro, with EUR/GBP climbing 0.50% to 0.7479.

Later in the day, the U.S. was to publish the weekly report on initial jobless claims.

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